The Household Within the Family Office

The modern single family office has, over the past two decades, expanded its remit far beyond investment. It now superintends governance, philanthropy, succession, education, security, and increasingly the operational life of residences. The household, once the province of a butler and a housekeeper reporting privately to a principal, has been drawn into the orbit of the office. This is, in many cases, a benefit. In others, it has produced a quiet friction whose origin is not always understood.

The friction arises because a family office is structured to manage by exception, by report, by quarterly review. A household is structured to anticipate, to absent itself, to make the principal's life unobtrusive in its ease. The cadence of the two is different. The vocabulary of the two is different. When the office attempts to govern the household by the methods of the office, it tends to produce paperwork without warmth. When the household attempts to operate as if the office did not exist, it tends to produce duplication and, in time, financial untidiness.

Two institutions, one principal

Our view is that the household and the family office are best understood as two institutions in the service of a single principal, each with its own competencies, each entitled to be governed in its own register. The chief of staff or principal advisor in the office should not, ordinarily, be the same person who supervises the butler. The work is different, the temperaments are different, and the accountability is different. A clear separation, with deliberate points of meeting, almost always produces a better result than a single line of authority that attempts to combine both.

We have seen, in the houses we serve, a number of arrangements that succeed. The most common is the one in which the principal employs a director of residences who reports to the chief of staff on matters of budget, contract, and capital, and who reports privately and directly to the principal on matters of household life. This dual reporting line, when established with goodwill on both sides, produces a household that is both well governed and unencumbered.

Where the office helps

There are domains in which the family office is indispensable to the household. Insurance, employment law, payroll, regulatory compliance, immigration, the structuring of staff accommodation, the coordination of multiple residences across jurisdictions: in all of these, the office brings discipline that no household, however senior, can supply alone. A house staff that operates without this support tends, over time, to become exposed in ways that only become visible in a moment of difficulty.

Equally, the office benefits from a household that is itself well structured. Staff handbooks, position descriptions, succession plans within the staff itself, archived records of the residence: these are the documents the office depends upon. A household that produces them as a matter of course is a household with which the office can work easily. A household that does not is a household with which the office is in perpetual reconstruction.

Where the household must remain its own

There is a domain, however, that belongs to the household alone, and which the office encroaches upon at the family's cost. The atmosphere of the residence, the rhythm of the principal's day, the unannounced courtesies that mark a great house: these cannot be procured, audited, or reported upon. They are the work of senior staff who have served the family long enough to know what is wanted before it is said. A family office which respects this domain, and which trusts the household to govern it, will find that the household repays that trust generously.

Our work, when an office invites us to assist with the structure of a household or with senior recruitment, begins with a quiet observation of where the office ends and where the household must begin. The conversation that follows is often the most useful part of the engagement, irrespective of whether any appointment is made. A family that has had this conversation once, in earnest, rarely needs to have it again.